No, a Pope does not have to die to leave office (I've been getting that question a lot this morning). Over at America magazine's blog, In All Things, I've highlighted some of the canonical grounding for this decision of Pope Benedict XVI to resign from office and the reasons why it has unfolded the way it has.
For those who are interested, perhaps the best-known example of a pope resigning was in 1294 when Pope Celestine V (d. 1296) resigned from his office. Benedict XVI is the first in several centuries. According to the Code of Canon Law (CIC) this right of the Roman Pontiff falls under Canon 332, no. 2, which reads: "If it happens that the Roman Pontiff resigns his office, it is required for validity that the resignation is made freely and properly manifested but not that it is accepted by anyone." This helps to explain the timing of the Pope's decision, which is an act that can only take place when he is still of sound mind and body.
As for the delivery of this news to the cardinals in attendance this morning, some canon law scholars believe this is essential in assuring the legitimacy of the resignation. According to canonist Knut Walf, "The resignation from office of the pope must be sufficiently manifested and requires no acceptance 'by anyone.' The recipient of the 'manifestation' is not specified. Some commentators are of the opinion that the college of cardinals or its dean as the competent electoral body must be informed of the resignation" (New Commentary on the Code of Canon Law, eds. J. Beal, J. Coriden, and T. Green [2000] p. 438). Needless to say, this is a very important announcement of great historical significance.
The process here is not unlike the retirement of any other bishop (don't forget, the Pope is first and foremost the Bishop of Rome, as Canon 331 refers to him: "The bishop of the Roman Church"), with the caveat that the Pope does not answer to anyone, so there is no "technical" recipient of his resignation. All other bishops submit their letters of resignation to him.